A new report out last week from the Digital Citizens Alliance and MediaLink estimated that ad piracy sites generate $227 million in aggregate revenue by running ads next to someone else’s copyrighted content. The report studied 596 ad-supported sites, calling out dozens of brand advertisers whose ads were found to be running on copyright infringing sites, further highlighting the rampant amount of fraudulent activities that take place in digital media today.

I sat on a panel at the Digital Content Entertainment expo to discuss various ways in which the operators of these sites avoid detection and continue to run advertisements despite avoidance efforts from advertisers. The group expressed concerns that with more dollars shifting to programmatic buying where there is less control of the advertising environment, the problem will continue to grow. At DV, we have found that up to 45% of the inventory offered through programmatic channels falls into what we call the “transparency gap” – where the site on which the ad gets delivered is different from the site on which the advertisers think they are bidding – the biggest factor that allows ad supported piracy sites to run advertising undetected.

The panel also discussed the connection between these types of sites and other types of online advertising fraud and how they are more effective tackled together versus separately. Last year, DV published a whitepaper unveiling one of the largest fraud rings which dives into detail on how they operated and how the various types of frauds are interlinked and must be fought together.

That’s why it’s critical to employ fraud protection services on digital campaigns as the ‘bad guys’ are highly sophisticated at scams like hidden ads, impression laundering and helping to monetize copyright infringement sites.

The good news is that there are solutions available to combat this problem, such as the thorough impression quality evaluation we power at DV utilizing our patented dual verification technology, which ultimately prevent ads from appearing on these sites. However, there are also obstacles that are still in market for us as an industry preventing us to fully tackle this problem effectively.

The below infographic highlights the findings in the Digital Citizens Alliance report.

We need more education and awareness across the entire ecosystem especially with the advertiser – as they will eventually be the ones that will create the demand needed to resolve the problem. There has been significant increase in awareness in the past year, since now that both the IAB and ANA have gotten vocal about this (with both IAB CEO Randall Rothenberg and ANA CEO Bob Liodice speaking about the topic at length at the IAB Leadership Summit earlier this month), and we think the awareness and actions will continue to increase. Expect to hear and see much more discussion and action around this topic in 2014.